Biodiversity net gain on new commercial developments
With sustainability of the built environment now so high on the political agenda, anyone involved in the development of new housing and commercial development is probably already aware of the government’s proposals for a mandatory biodiversity net gain (or “BNG”) requirement on such developments. It will apply wherever new development in England results in loss or degradation of habitat, and either (a) requires planning permission under the Town and Country Planning Act 1990; or (b) is a “nationally significant infrastructure project”. In this article we are only looking at those developments that require planning permission as there is a separate regime for NSIPs.
BNG has been defined by Defra as “an approach to development that aims to leave the natural environment in a measurably better state than beforehand… Development that adopts a biodiversity net gain approach seeks to make its impact on the environment positive, delivering improvements through habitat creation or enhancement after avoiding or mitigating harm as far as possible.”
In a recent announcement, the government confirmed that the BNG provisions will commence for planning applications in January 2024 (it had previously been November 2023), except in the case of “small sites” (which, for non-residential developments, are those where the floor space is less than 1,000 sqm or the site area is less than 1 ha), where it will commence in April 2024. The longer transition period for small sites is to give local planning authorities more time to prepare for the influx of minor applications.
A lot of government guidance has already been issued, which is beyond the scope of this article. There are though links to some overview resources here:
In its recent announcement, the government also indicated that all further required guidance and implementation regulations will be published by the end of November. We will therefore return to this once further guidance is issued.
The BNG provisions provide that every planning permission in England is deemed to be granted subject to a condition that (a) development cannot begin until the developer has submitted a “biodiversity gain plan” to the local planning authority; and (b) that the authority has approved the plan. There will be additional requirements for the plan in respect of phased developments. Defra has just published a “Biodiversity Gain Plan template” (available here) and a “Guidance for Developers” note on its completion (available here).
The aim of this is to ensure that the “biodiversity value” of the development exceeds that of the pre-development on-site habitat by at least 10% (but which figure can be amended by regulations). In calculating a development’s biodiversity value, account can also be taken of the value of any registered off-site biodiversity gain allocated to the development, and the value of any “biodiversity credits” purchased for the development. However, Defra’s preference is for on-site rather than off-site gains, and any loss of “highly distinctive habitats” (to be defined) will always have to be compensated for in a scheme that creates the same type of habitat.
Calculation of “biodiversity value” is beyond the scope of this note, but it is done by using the “biodiversity metric”, drafts of which have been published by Natural England (the current version of which can be found here, and the “small sites” version here) with the final statutory versions to be published by Defra in November 2023.
In calculating the post-development biodiversity value, the local planning authority will apply the metric to the developer’s biodiversity gain plan. However, the authority will only be able to consider significant increases in on-site biodiversity value if they are secured through a suitable mechanism to ensure that habitat enhancement is maintained for at least 30 years after completion of the development. This will be done by either (a) a condition in the planning permission for the development; (b) a planning obligation; or (c) a “conservation covenant”.
Conservation covenants were introduced in the Environment Act 2021 as a way of supporting the implementation of BNG. They are private, voluntary agreements between a landowner and a responsible body (such as a charity, conservation body or other designated body) that provide for conservation of the natural environment and heritage assets for the public good in England. They can run with the land and therefore bind future owners to secure the conservation benefits for the long term.
Biodiversity gain sites
We noted above that in calculating a development’s biodiversity value, account can be taken of off-site biodiversity gain value allocated to the development. Off-site biodiversity gain sites are those where (a) someone is required to carry out habitat enhancement under either a planning condition or conservation covenant; (b) that enhancement is to be maintained for at least 30 years; and (c) the enhancement is allocated to a particular development.
The off-site value allocated to any specific development will be recorded in a register open to the public. This is intended to provide transparency and allow all to see that off-site gains are only allocated to one development, and that necessary arrangements for their delivery and maintenance are in place. The register is due to be opened by Natural England in November 2023.
We also noted that a developer can purchase biodiversity credits to meet its BNG obligation. Statutory credits will be available for purchase from the Secretary of State. To buy these the developer will have to demonstrate that it is unable to meet its BNG obligation onsite, or via the off-site market. The Secretary of State can apply payments received for these to enhance habitat or develop strategic ecological networks.
There are only limited exceptions to the biodiversity requirement as a condition of a planning permission for development that would otherwise result in a loss or degradation of habitat. It will not apply to planning permissions granted by a development order (including the GPDO under which various types of development can proceed without needing a planning permission), or for urgent Crown development.
The Secretary of State can also make regulations to specify other exemptions, but these would not prevent planning authorities requiring BNG to be delivered by exempted developments in line with local or national planning policy. The other exemptions have been confirmed to be:
- Development whose habitat impact is below a de minimis;
- Planning applications by householders;
- Small scale self-build and custom housebuilding (subject to certain controls); and
- Biodiversity gain sites as referred to above (where habitat is enhanced for wildlife).
Defra is expected to publish guidance on these shortly.
Defra has also just published its initial list of “irreplaceable habitats” for BNG. Of note is that these include ancient woodlands and “ancient and veteran trees”. Irreplaceable habitats are considered to have such a high biodiversity value that it would be almost impossible to meet the BNG objective for any development that resulted in their loss. Mandatory BNG does not therefore apply to applications for developments on these sites, and the existing planning policy protections for them will remain in place. The final list of irreplaceable habitats is not expected until the second half of 2024.
As BNG will be implemented through the deemed imposition of a planning condition, any appeals will be determined through the existing planning appeal process.
The aim of BNG is that development proposals must “leave biodiversity in a better state than before”. To achieve that we are going to see BNG conditions in planning permissions setting out what is required. These proposals will be required to follow the “mitigation hierarchy” requiring developers firstly to avoid habitat impacts where possible, or secondly to minimise them, then take on-site measures to rehabilitate or restore biodiversity, before finally off-setting residual, unavoidable impacts. This is an approach that will need developers to work together with stakeholders to support their biodiversity goals. The construction industry research and information association has published a useful “Good practice principles for development” setting out ten principles for good practice in achieving BNG (available here) which may also be used to inform the requirements of local planning authorities.